L.PR.A To Be Redeemed

Loblaw Companies Limited has announced (as part of their new issue announcement):

that it intends to redeem all of its outstanding Second Preferred Shares, Series A (TSX:L.PR.A) (the “Preferred Shares Series A”) for cash on July 31, 2015 (“redemption date”). The redemption price for each Preferred Share Series A will be $25.00. Holders of Preferred Shares Series A will separately receive all accrued and unpaid dividends outstanding on the redemption date. Loblaw intends to use the net proceeds of the issue of Preferred Shares Series B to partially fund the redemption of its Preferred Shares Series A. The offering is expected to close on or about June 9, 2015.

This is not really the biggest surprise in the world – L.PR.A is an OperatingRetractible paying 5.95% which becomes redeemable at par on 2015-7-31 and also becomes retractible for shares on that date.

How times change! When this issue was announced 2008-6-11 I opined that it looked expensive and when it commenced trading 2008-6-20 it turned out that the market agreed with me.

Doubtless this will cause a certain amount of angst for some investors … given the imminent redemption of MFC.PR.A the ranks of OperatingRetractibles are dwindling quickly!

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